Sales of previously owned homes fell in January for the 12th consecutive month, to their lowest level since October of 2010, as high prices and mortgage rates continued to limit housing affordability.
Existing home sales dipped 0.7% last month to an annual rate of 4 million, the National Association of Realtors (NAR) reported Tuesday. Although that was a slower drop than in December, economists had been anticipating an increase.
The NAR noted the median price for an existing home increased 1.3% to $359,000, and according to Freddie Mac, the average rate on a fixed-rate, 30-year conforming home loan (up to $726,200) was 6.32% last week, up from 6.12% the week before and 3.92% a year earlier.
Home sales are “bottoming out,” with prices varying depending on each market’s affordability, said NAR Chief Economist Lawrence Yun. He noted lower-priced regions are experiencing modest growth while more expensive ones are seeing declines.
Yun added that some good news for potential buyers is that total housing inventory at the end of January was 980,000 units, a gain of 2.1% from December. He explained that while the number of houses available remains low, buyers are starting to have better negotiating power. Yun indicated that homes on the market for more than two months can be purchased for about 10% less than the original list price.